From the monthly archives:

October 2013

If you haven’t been to a web site called Payscale.com, take a minute and visit it. Sadly, it’s not terribly useful for estimating entry-level and junior investment banking jobs, but it’s still a hoot. And there’s also plenty of other good, solid information for you.

Job hunting is job hunting, whether you’re a fixed income analyst or a junior trader or a database administrator or a sous chef. It’s all about finding the right opportunity, then getting to “yes” with a prospective employer. Your next boss is just likely to pay better than the sous chef’s. And no matter how much you’re likely to be paid in investment banking, there are certain people who are likely to make you look like a retail assistant manager in a JCPenney suit. They’re called “celebrities,” and they have to negotiate over their gigs, too.

The waggish bloggers dispense career advice on Payscale.com with the hook of “[n] Career Lessons from [Famous Person]”. We first stumbled across this sage, if oddly presented, advice in a post titled “5 Career Lessons from Iggy Pop“.  “If Iggy Pop seems like a strange person to turn to for guidance, consider this: he’s been making music for over 50 years now, has survived everything from drug addiction to disco, and, with his band the Stooges, recently entered the Rock and Roll Hall of Fame,” blogger Jen Hubley Luckwalt begins. “Clearly, he knows a thing or two about enduring, even if he can’t advise you on corporate dress codes.”

She then outlines negotiating lessons gleaned from Iggy’s concert rider from his 2006 tour with The Stooges. For example, the erstwhile James N. Osterberg requests red wine be available backstage, but leaves such details as labels and vintage at the suggestion rather than demand level. From this, Luckwalt infers, “Be considerate.” Other elements of the 18-page document provide such instruction as “Use humor,” “Be well-informed,” “Understand the importance of environment,” and “Be yourself.”

But Iggy Pop isn’t the only celebrity that inspires Payscale.com’s bloggers. In response to Miley Cyrus’s infamous twerking performance at the MTV Awards (no link — you’ve already seen it), Luckwalt draws five more lessons from the young woman who will never again be singing under the name “Montana” (although she might end up dancing under the name “Dakota”). Credit the blogger for drawing five examples of things not to do.

Speaking of people who don’t know when to get off the stage during awards shows, there are “4 Ways We Should All Be More Like Kanye West.” From the hip hop star’s grousing about never having won Album of the Year, we are offered this takeaway: “Realize you have more to learn and room to grow.”  Mark Zuckerberg. The Kardashians. Tina Fey. “The Ladies of Madmen.” And every geek-boy’s favorite: She-Hulk (“Don’t accept less than you deserve”). All these and more are fodder for this offbeat but worthwhile blog.

We humbly offer this lesson for investment banking job hunters, inspired by the scribes at Payscale.com: “Find your niche, stand apart from the pack, and don’t try to be like everybody else.”

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Let’s be honest, there are only 20,000 entry-level “analyst” or “associate” jobs opening up worldwide annually in the investment banking world. The competition is anywhere from five- to ten-to-one. Odds are, you’re not getting one. But as Han Solo so wisely put it,  “Never tell me the odds.”

Fortunately, with a little preparation and dedication to task, you can even up these odds. According to Careers-in-Finance.com, there are at least four things you can do to separate yourself from the white-shod herd.

First, talk to as many people in the field as possible. Most “informational interviews” are a waste of time — except for the one that isn’t. And you never know which one that is. Play the numbers game.

Next, go for specific investment bank “boot camp” training. Not only do they polish your skills, they give you a whole new old boys’ network to explore.

Third, realize there’s no such thing as “investment banking”. It’s all specific to products and industries. Do your homework on issues related to whatever niche your interviewer specializes in.

After doing some of that homework, you’ll figure out which verticals you’re best suited for and most interested in. Devour books and trade journals and become an expert in those.
And if you’re not located in New York, London or some other financial hub, it’s worth the plane ticket to get in the same room as the individual who’d otherwise be glancing at his Bloomberg feed while you’re talking. There’s no substitute for a face-to-face meeting.

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The shifting dynamics of the global economy are impacting banking, capital markets and retail sales. Consumer growth in developing nations is causing retailers to shift their focus from the United States, Canada and the United Kingdom to places like China. In turn, this is changing the skills needed to compete in the investment banking industry.

Change to Global Brands

Goldman Sachs reports that information technology has transformed many local goods or services into global brands.  Communication across borders between consumers continues to grow causing the spread of niche products to wider audiences. As a result, prototyping new products or services now requires a larger emphasis on foreign markets and a broad spectrum of consumer tastes. China’s markets are becoming more consumer-based, and Latin American economies are seeing growth in infrastructure and disposable incomes.  Investment banks have to account for these trends when making capital allocation decisions.

Shift to Ecommerce

The scope of e-commerce is expanding as consumers become more familiar with the Internet. Goldman Sachs also notes more customers are now purchasing products without actually touching, feeling or trying them on, which is causing corporations to shift their operational focus to online marketplaces. Businesses large and small are discovering that e-commerce is cost-effective relative to traditional retail shops in malls or outlets. The ability to reach global audiences via social media pages, websites and other online platforms is expanding the reach of even the smallest of businesses. Mastering technology and cultural gaps will be essential for entering foreign economies.

Technological and Cultural Insight

In order for investment bankers to be successful, they need to understand the shifts in global consumer activity and the impact of ecommerce on retailing. Advances in technology are at the core of the changes seen in consumerism, and the Internet is making it necessary to rethink traditional business models.  Social media, online marketplaces and search engine optimization are changing the dynamics of retail activity. Technological savvy will provide investment bankers the insight needed to make effective decisions.  Investment bankers will also have to embrace new languages and cultural norms to network in foreign markets.

The skills needed to succeed in investment banking are changing due to shifts in consumer growth. New political systems, languages and laws are impacting investment decisions.  In order for financial professionals to remain competitive, they will have to adapt to the ever-changing conditions of the global economy.

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